This Decade Will Mark a Brick-and-Mortar Revival

It’s hard to look any further than the next day during the current COVID-19 pandemic, but we will persevere and ultimately get through this crisis. Shifting our attention to the future while meeting the day-to-day challenges can be a good strategy in coping with a pandemic. To that end, I’d like to turn our attention right now to what I believe is a current inflection point for the retail industry. The pendulum has been swinging harder towards e-commerce in recent years. For instance, according to reports, foot traffic to U.S. stores dropped by over 6 percent on Black Friday, with greater numbers of people ordering online or going to stores on Thanksgiving Day. Is this indicative of a trend that bricks-n-mortar has been diminished, making it a marginal strategy for retailers in the next decade?

Not so fast.

While e-commerce will clearly grow in importance in terms of retailer growth strategies, brick-and-mortar will continue to play a key role in companies’ fortunes. It just won’t play the same role that it traditionally has. While it can be argued that technology has been the key disruptor in retail strategies and business models, it's also opening up new avenues of opportunity for how brands can employ physical stores to their advantage.

In fact, I predict that in 10 years, at the dawn of the ‘30s, we will look back at the 20s as the decade of the brick-and-mortar revival. This revival will be rooted in transformation.

Amazon.com has acquired Whole Foods to compete against Walmart — 487 physical stores are a powerful resource for the e-commerce giant. It needed a larger physical footprint to support its supply chain, but most of all it wanted a trojan horse for grocery shoppers. Fresh products can always take online shoppers offline, and once they're in-store, well, they buy everything else.

The simplest illustration of the brick-and-mortar model of the future is the PickUp option now available at Amazon for groceries.

Could We Do Even Better?

As retailers push forward, brick-and-mortar will increasingly focus on the customer experience, not necessarily the end purchase. This will likely mean transforming brick-and-mortar stores into primarily "edu-tainment" venues. Fashion outlets will employ stylists and hold talks on sustainable fashion; sporting goods stores will offer coaching and physio appointments; tech outlets will offer training workshops on how to get the most out of their software. This is the approach that the Apple Store pioneered years ago, and it's now being adapted across all major marketing verticals.

The convenience and cost effectiveness of e-commerce is a powerful value proposition, but it can never extinguish the social impulse to go to a physical mall or shop with friends for a couple of hours. If, like me, you've logged more days of “working from home” of late than usual, limiting your shopping experiences to online, the innate human desire to leave the house and go shopping at retail resonates loud and clear.

Going to a mall or store, by the way, isn't just about “window shopping” like it was in previous generations. Nowadays, going to the “mall” is akin to going to the movies, a sporting event, a fun class for personal enrichment, a concert, etc.

Samsung KX in London is not a “shop”; it’s an experiential complex that hosts world-class events that fit with the brand’s high-tech ethos. Even digital-native direct-to-consumer (DTC) brands have realized they’re missing out on a crucial touchpoint and have begun opening physical locations.

Experience is Profitable

While the brick-and-mortar customer experience will be a crucial brand-building strategy, it will also be a dominant revenue driver. Offering a positive, inspiring brand experience will certainly drive more impulse purchases and e-commerce traffic, thereby pumping up sales.

If brands are also mindful about connecting physical retail footfall to an online sale, for which the technology platforms exist, it will change how retailers fundamentally look at the physical store as a touchpoint on the way to purchase, rather than just looking at the store’s own sales figures. Ten years ago showrooming emerged as the expression of people’s desire to see, touch, and try before they buy.

We're going to see brands leveraging technology much more in brick-and-mortar, aimed to facilitate the most seamless shopper experience. This will feature mobile checkout, product look-ups, and virtual changing rooms. In this way, technology will be used to remove friction in the shopper experience. Retailers will also benefit from dynamic pricing and stocking, better store fulfillment thanks to enhanced artificial intelligence and predictive modeling to advertise the right product for a specific audience, in the right context — location and time.

Retailers are remodeling consumer experiences to make them easier and more relevant. How can they be better at pushing consumers towards new products while retaining them with a loyalty program and providing a seamless experience between online and offline?

Brands will need a drive-to-store platform to better understand their audiences per location, better advertise what they offer in stores and, thereby, create superior consumer engagement for the brand with clear user consent. In this way, a brand is creating a new asset with a base of millions of consumers that become a part of its overall capital.

The opportunity to employ brick-and-mortar stores in a more relevant and contemporary way should excite, not trouble, marketers. This can only be done in a thoughtful and creative way, one that generates an experience that feels authentic to the brand. Just adding a café to your brick-and-mortar store is rote and not something that will distinguish your brand. It’s about what relevant and inspiring services you can offer your customers that chime with your brand message.

Stan Coignard serves as S4M’s Americas CEO and has been an executive board member since 2012.